Finance Bill - reactions from the property world

The Government's tax change announcement has met with a mixed reaction from estate agents

"While the changes are broadly as expected, the concern is that the generally heavier-handed approach from the Treasury towards the upper end of the housing market, including the higher stamp duty tax on homes worth more than £2m at the last budget, will send the message that the UK is increasingly unwelcoming to high net worth buyers," said Peter Rollings, CEO of estate agent Marsh & Parsons.

"If the cumulative effects of government tax policy artificially stop the wealthy – be they foreign or British – from buying in the capital, it will be to the detriment of the economy as well as the housing market. We should be persuading much needed wealth creators to come to the UK, along with the business, employment and consumer spending they bring, rather than encouraging them to stay away.”

“It’s a step in the right direction that key components of the housing market such as property developers, traders, rental businesses and charities may now face relief from the new levy, but those using a company to protect their anonymity, whether celebrities or oligarchs, will be among the big losers of the Draft Bill. Many buyers use special purpose vehicles to defend their privacy when they buy in the UK, rather than simply to avoid stamp duty charges, and the financial cost now involved in doing so is likely to act as a strong deterrent.

Robert Bartlett, CEO of Chesterton Humberts, commented: “Thankfully, the Bill contains no nasty surprises. The one area of remaining uncertainty surrounds Capital gains Tax: what rate will it be charged at and whether it will be applied retrospectively. Although a retrospective application of the charge is considered unlikely, the implications of such a move would be considerable. This might well deter foreign buyers who tend to hold for the longer term.

“What the Chancellor doesn’t appear to have acknowledged is the importance of first time buyers in helping revive the lacklustre housing market. Disappointingly, the Chancellor hasn’t introduced any new measures aimed specifically at helping this group of buyers and instead, repeated its plans to invest £300 million into the Affordable Home Programme and provide an additional £280 million for the FirstBuy equity loan scheme but a more effective measure would have perhaps been to re-introduce the Stamp Duty holiday.”

Marc Goldberg, Head of Sales at Hamptons International, said: “Stamp Duty Land Tax measures have taken the steam out of the previously buoyant Prime Central London market, particularly for the £2 million to £10 million market and today’s legislation has further deepened the current problem. Hamptons International fully supports the Government plans to clamp down on tax avoidance and accepted the increase from five to seven per cent Stamp Duty Land Tax on properties priced at £2m+ bought by individuals. However, as a result of these changes, we expect to see an uplift in the number of properties priced above £2m+ coming onto the market early next year, creating a further imbalance in supply and demand.”